Condo Buying Guide: Understanding Depreciation Rates

​Why Philippine Condo Prices Decline Over Time?

Whether you’re building a steady source of passive income or looking for a cozy space to live in, buying a condominium unit is a smart choice. This is a solid investment that can provide ROI, but be mindful that it may depreciate over time. Before investing in a condo in Baguio City or any part in the Philippines, make sure to understand how condominiums lose value and what you can do to make it worth your money.

Condo Depreciation and Its Impact on Owners

Depreciation is one of the most overlooked factors when buying a condo. Over time, condominium units lose value; this is particularly crucial to understand for first-time buyers. So, what does condo depreciation really mean and why it’s important to understand how it works? Unlike land properties that grow in value over time, buildings such as condominiums naturally degrade as years pass by.

There are several factors that affect the value of condo units including current market conditions, maintenance, age, and usage. Condos are like cars, they depreciate as you use them and can never be resold in their original price. While depreciation is not necessarily bad, understanding this phenomenon can help manage one’s expectations and make better financial decisions in the future.

How to Make Condo Depreciation Beneficial

The depreciation rate of condominiums is slow and complex depending on the amenities, location, developer, and quality of construction. If you buy a condo in Makati City or any prime commercial district, depreciation is much slower compared to condos in remote areas. That is because there is higher constant demand in prime locations such as in NCR.

• The best thing you can do to slow down condo depreciation is to keep your unit in good condition, making regular maintenance a must. Experts say that a well-maintained property is better in holding its value than properties without regular upkeep.
      
• Another way to make depreciation a positive thing for condo owners is when renting out their condos. Depreciation expenses can be deducted from the rental income as per Philippine tax laws.
      
• Choose a good location such as a condo near public transportation, universities, and business districts. There is a consistent high demand for condominiums and other properties that are located in a highly desirable area.

It’s also important to buy a condo from a trusted real estate developer as it will directly affect the depreciation rate of the unit. Well-maintained buildings from reputable developers often get higher values and retain property value over time. Always do your due diligence before choosing an investment to create more resilient assets.

Final Thoughts

Depreciation is not always a bad thing as it can also provide some positive effects on a buyer’s investment portfolio. Make sure to choose a condominium developer that offers excellent amenities and features that contribute to the overall value of the property. Consider a licensed real estate broker to help you decide which best condo in the Philippines suits your preferences and budget.